Vivendi Corporate Offices Raided

French authorities searched Vivendi Universal’s corporate headquarters in Paris and the homes of former Chief Executive Jean-Marie Messier on Thursday as the criminal investigation of the company’s accounting practices deepened.

It was the second time in recent months that investigators raided the headquarters, and authorities would not comment on what they were looking for. Vivendi confirmed that a team of criminal investigators was “carrying out inquiries at the company’s head office,” and said it was cooperating fully.

The investigation by the Paris prosecutor stems from a July 18 complaint filed by a group of French shareholders who claim that under Messier, Vivendi published “false accounts” for 2000 and 2001 and gave misleading outlooks for 2002. They allege that Messier was attempting to conceal the company’s financial crisis from investors and blame him for a sharp downturn in the stock.

Vivendi’s share price had plummeted 70% before Messier was ousted in a boardroom coup this summer. The new management said the company nearly was forced to file for bankruptcy protection from heavy debts piled on after Messier led a three-year acquisition binge, which included buying Hollywood icons Universal Studios and Universal Music Group.

Seeking to distance itself from the actions of Messier and other former executives, Vivendi stressed Thursday that it is also a “plaintiff claiming damages” in the case.

The investigation comes on top of others by the U.S. attorney’s office for the Southern District of New York; the Securities and Exchange Commission, which upgraded its inquiry to a full-blown investigation last month; and French stock market regulators, who raided Vivendi’s headquarters this summer.

Sources say the inquiries focus on what Messier and other former officers knew about the company’s liquidity crisis, when they knew it and what they conveyed to shareholders.

It’s unclear what documents authorities were searching for in the latest raid, but a source familiar with the matter said they probably include many of the same records seized by France’s stock market regulator, such as key notes and e-mails between Messier and Vivendi’s former chief financial officer, Guillaume Hannezo.

French authorities also are eager to examine an auditor’s report that Vivendi commissioned shortly after Messier’s ouster, said Frederik Carnoy, who represents the group of 4,000 shareholders behind the complaint. Vivendi has said the report found no evidence of any improper accounting.

Carnoy said the prosecutor’s office also is investigating claims made in his lawsuit that there were irregularities in the company’s financial accounts for 2001, including dozens of pages that Carnoy alleges appear to have been substituted in an annual report filed with the French commercial court.

“What we want to know is, have they concealed information? Are they hiding anything?” Carnoy said in an interview Thursday night.

In addition to searching Vivendi’s corporate offices, the police on Thursday searched Messier’s flat in central Paris, as well as a house outside the city.

Messier reportedly canceled plans to meet with the Anglo-American Press Assn. in Paris Thursday evening.

Messier, who has denied any wrongdoing, could not be reached for comment. In an interview last month, his attorney, Olivier Metzner, accused French authorities of being on an apparent “fishing expedition,” and said their investigations will show that the accusations made against Messier were ill-founded.

Police also were searching homes of other former Vivendi executives, including former chief operating officer Eric Licoys, a source said. Licoys could not be reached for comment.

Company sources downplayed Thursday’s searches, saying they were standard procedure in any such investigation in France. Investor reaction was muted, with Vivendi shares falling 19 cents to $16.10 on the New York Stock Exchange.

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Times staff researcher Sarah White of the Paris bureau contributed to this report.